As efforts to narrow the gender pay gap intensify across the globe, we launch the first article in our new series. Click the photo below to read the article,which provides an overview of the international picture.

One month from today, on May 25, 2018, the European Union (EU) General Data Protection Regulation (GDPR) will go into effect. In light of this, we have been recommending companies review their data privacy policies and practices in the context of equity plan participation and update their share plan documents. In the final month, we want to highlight these items again and encourage you to make sure your company’s equity programs are ready for the GDPR.

On April 9, 2018, the Ninth Circuit issued its decision in Rizo v. Yovino and affirmed that prior salary, alone or in combination with other factors, cannot justify a wage differential between male and female employees. Judge Stephen Reinhardt, who died unexpectedly in late March, authored the ruling. Known as the “Liberal Lion” of the federal judiciary in California, Judge Reinhardt also overturned bans on same-sex marriage and physician-assisted suicide and declared prison overcrowding unconstitutional.

Jordan Kirkness and Susan MacMillan in our Toronto office report that the government of Ontario announced yesterday that it will introduce new legislation to require certain employers to track and publish their compensation information.

The proposed legislation is part of the province’s initiative to advance women’s economic status and create more equitable workplaces (the initiative is titled “Then Now Next: Ontario’s Strategy for Women’s Economic Empowerment”). Yesterday’s announcement comes on the heels of last week’s budget plan in which the Canadian federal government outlined proposed proactive pay equity legislation that would apply to federally regulated employers — see here for our article on the proposed federal legislation.

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law bringing significant changes to US tax law. One provision of the Act may further incentivize individuals to work as independent contractors instead of as traditional employees.

The new provision allows for independent contractors, and for service providers structured as a partnership or other flow-through entities, the potential to deduct up to 20% of their revenue from their taxable income. And while some companies might view the opportunity to re-classify individuals from employees to independent contractors as a “win–win” scenario, it could create substantial legal exposure for employers.

As of December 20, 2017, both the House of Representatives and the Senate have voted to approve the final version of the Tax Cuts and Jobs Act, in substantially the form released by the Conference Committee on December 15th. The bill is expected to be presented to the President for signature before Christmas, making US tax reform a reality for 2018.

What’s In? From a Compensation & Benefits perspective, among other things, the approved bill includes:

Significant changes to Code Section 162(m);

A new tax deferral regime for options and RSUs granted by private companies;

Elimination of exclusion for fewer than expected employer-provided fringe benefits; and

What’s Out? Fortunately, the final bill does not include a Senate proposal to require the use of a first-in-first-out (FIFO) methodology when calculating capital gains on sale of shares, nor does it add back any of the changes to non-qualified deferred compensation that were proposed in the initial House version of the bill. Also, most of the changes proposed to qualified retirement plans have been eliminated.

ABOUT BAKER & MCKENZIE

Founded in 1949, Baker McKenzie advises many of the world’s most dynamic and successful business organizations through more than 4,100 locally qualified lawyers and 6,000 professional staff in 77 offices in 47 countries. The Firm is known for its global perspective, deep understanding of the local language and culture of business, uncompromising commitment to excellence, and world-class fluency in its client service. For more information: www.bakermckenzie.com